Paid Search ROI High for Tablets; Device Owners Responsive to Ads

July 27, 2012

adobe-us-paid-search-metrics-in-q22012-july2012.pngDespite having lower cost per click (CPC) rates than PCs, tablets offered a 68% higher ROI than PCs for US search advertisers in Q2, based on 20% higher conversion rates, according to a July 2012 report from Adobe. Overall, search spend increased on a year-over-year basis for PCs, tablets, and smartphones, with smartphones offering a slightly higher ROI than PCs. In Q2, for financial services advertisers, conversion rates for tablets were 22% higher than for PCs, while for retail campaigns, they were 19% higher. Smartphone conversion rates were 38% and 43% lower than for PCs, respectively.

When it comes to ROI, tablets scored 55% higher than PCs for financial services advertisers, and 73% higher for retail campaigns. While paid search ROI was 12% lower for smartphones than PCs for the financial services sector, it was 16% higher for the retail sector.

Tablet Owners Want Interactive Ads

The higher paid search conversion rates and ROI for tablets than smartphones is not surprising, given a recent study from the IAB and ABI Research that found tablet users to be much more responsive to ads than smartphone owners. A new study released in July by the IAB UK also finds tablet owners to be open to advertising: close to two-thirds of the survey respondents said they would prefer tablet applications to have lower upfront costs with more ads, rather than higher upfront costs with fewer ads.

It appears that these tablet owners are more responsive to interactive ads: those exposed to such ads (including video or gaming) found them to be more engaging, memorable, and innovative than static ads.

Tablet Commerce Outstrips Other Devices

Advertisers targeting tablet owners will find a group that is willing to make significant purchases from their devices. According to a July 2012 study from Adyen that examined 8 months of payments, iPad users spent on average 20% more per purchase than other mobile device users. (Recent data from Strategy Analytics estimates that the iPad now holds 68% share of the global tablet market). In fact, per the Adyen findings, the iPad now generates 3.6% of all mobile payments, compared to 3% on iPhones and 1.5% on Android devices. Analyzing the number of payments that originate from mobile devices as compared to the total number of payment transactions it processes, Adyen discovered that the iPad now accounts for 8.4% of worldwide mobile transactions, up from 3.6% just 8 months ago.

An April 2012 study from RichRelevance found similarly impressive statistics for the iPad, revealing that the Apple device accounts for nearly two-thirds of all US mobile shopping sessions, and an impressive 89% of all mobile shopping revenue. That study also found the average order value (AOV) for iPads ($158) to be more than 50% higher than for other iOS devices ($104) and other mobile devices ($105), and also to outpace AOV on desktops and laptops ($153).

Other Findings:

  • According to Adobe’s “Q2 2012 Global Digital Advertising Update,” year-over-year search spending was up 13% in the US, 12% in Germany, and 18% in the UK. The US saw the highest year-over-year increase in ROI (23%), followed by the UK (5%). Germany experienced a 5% decrease in ROI.
  • Google’s click volume rose 32% year-over-year, while Bing/Yahoo’s volume rose 26%. Google continued to control the market, at 81% share of click volume, though that was down slightly from 83% the previous quarter.
  • According to the IAB UK study, 55% of tablet owners believe advertising can do things on tablets that it can’t on other devices, although 30% of the respondents have a negative opinion of the ads they have seen on tablets in the past.
  • Context is important to tablet owners: 95% say it is important that ads are not obtrusive and don’t interfere with their activities, and 82% believe the ads should adapt to the surrounding content.
  • The Adyen report also found that 12.6% of daily deal site transactions originate from a mobile device, and 7.2% of retail sector transactions also come from a mobile device.

About the Data: The IAB UK study was delivered by Ipsos. Ipsos recruited 1,000 tablet owners to undertake a survey on their tablet. The 1,000 respondents were split into 9 groups, and each asked to browse a mocked up newspaper page on their tablet. Each of the groups were exposed to a different type of ad format on this page (3/4 page, MPU and Leaderboard) which also had different levels of interactivity from static (no movement/interaction), dynamic (animated) to interactive (had video, game, 360 view or image gallery functionality). After browsing the page, the respondent was asked a 10 minute questionnaire about their experience with the tablet advertising.

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